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Citi's chief economist Willem Buiter has trained his mental shotgun at goldbugs everywhere, and unloaded both barrels.
In a research piece published late yesterday, the Anglo-Dutch economist argued that the metal was not so precious and merely a "six thousand year-old bubble" with hardly any real value. Mr Buiter therefore compares gold to the "intrinsically useless" stone money of the Isle of Yap.
Gold is unlike any other commodity. The only things that come close to it are Bitcoin and similar digital peer-to-peer currencies. Gold is costly to extract from the earth and to refine to a reasonable degree of purity. There is an (unknown) upper limit to the total amount that is recoverable at any cost. It is costly to store. It has no significant remaining uses as a producer good - equivalent or superior alternatives exist for all its industrial uses.
Mr Buiter does concede that gold has proven a decent investment in recent decades, and calculates that if you bought gold in 1971 and held onto it until 2013 you would have made a real annual rate of return of 4.3 per cent. "Reasonable given the riskiness of the asset," he writes.
Citi's chief economist argues that despite the protestations of goldbugs, the yellow metal is simply another fiat currency by another name - with its value derived from the collective belief that it has value.
It need not derive its value from the government demanding it in payment of taxes or insisting it should be accepted within the national jurisdiction in settlement of debt. Instead the defining property of fiat money is that it has no intrinsic value; it derives any value it has only from the shared belief by a sufficient number of economic actors that it has that value.
As a fiat commodity currency, Mr Buiter admits that gold can appreciate when other "intrinsically useless and valueless fiat currencies" - like the dollar, the yen, the euro or sterling - lose credibility. Given the scale of central bank electronic money printing in recent years, that credibility is clearly being tested.
So until the risk of serious inflation is completely removed from the medium-term outlook, gold could remain attractive as a store of value (despite the cost of storing it), he concedes.
Even though I view gold as a pure bubble, that bubble may well be good for another 6,000 years. Its value may go from $1,200 per fine ounce to $1,500 or $5,000 for all I know. Investing a vast amount of money in something whose value is based on nothing more than a set of self-confirming beliefs will make for an exciting ride.
Below is a fun chart of the nominal and inflation-adjusted gold price since 1790.